Mexico’s Greenhouse Gas Mitigation Actions

1. Mexico’s Greenhouse Gas Mitigation Actions Workshop on Domestic Mitigation Strategy and Market Instruments The World Bank Juan C. Mata Sandoval Director General for Climate Change Policy Ministry of the Environment and Natural Resources March 9, 2010 Seoul, Republic of Korea

2. Mexico’s Climate Change Program, PECC, includes unilateral NAMAs aligned with the National Development Plan (2007-2012) • PECC provides short term mitigation targets as well as long term guidelines and identifies most vulnerable sectors of the economy • Defines mitigation actions to reduce 51 Mt CO2e by 2012 or 6% with respect to baseline (786 Mt CO2e) • Sets general guidelines to establish an emission reduction pathway towards 2030 and 2050 (aspirational target of 50-50 compared to the 2000 base year). • Identifies key systems most vulnerable to climate change and points out highest risk areas for each system • All NAMA´s included in PECC have federal budget guaranteed • Though require financial assistance to implement improved MRVs actions.

3. … and it is structured with a long-term vision, mitigation and adaptation objectives, and cross cutting elements of public policy • Long Term Vision • Global long term vision • Mexico's mitigation pathway • Mexico's adaptation pathway • Mitigation 86 goals • Energy supply • Energy use • Agriculture, forests and other land uses • Waste • Adaptation 142 goals • Hydrological resources • Agriculture, livestock, forestry and fishery • Ecosystems • Integrated risk management • Energy, industry and services, communication and transport infrastructure • Land zoning and urban development • Public health • Components of a cross cutting policy 66 goals • Foreign policy • Institutional strengthening • Economics of climate change • Education, training, information and communication • Research and technological development

4. … equivalent to a 70% GHG emissions reduction by 2050, with respect to the BAU scenario • The long-term aspirational goal… • Is not a legally binding commitment • Is conditioned by: • the availability of technical and financial support • the signature of a multilateral agreement in line with globally adopted parameters The indicative goal states that, if the international community were determined to successfully face the immense challenge that climate change poses, Mexico would be ready to fulfill its corresponding part.

5. Estimates indicate that the country has the potential to reduce its emissions by approximately 535 Mt CO2e, by 2030 GHG Abatement Cost Curve for Mexico in 2030 (USD/t CO2e) “No regrets” mitigation measures • 144 abatement opportunities identified at a price below US$90/tCO2e abated (excluding transaction and information costs) • 40 percent of the abatement potential is negative or zero cost • Weighted average abatement cost is about US$2/ tCO2e • No silver bullet to emissions reduction exists – action is required in all sectors • Many abatement opportunities are fragmented, e.g., energy efficiency and process improvements in industry * LDVs = light duty vehicles; HDVs = heavy duty vehicles Note: The cost estimate for the light-colored bars is approximate Source: McKinsey GHG abatement cost curve v2.0; McKinsey analysis

6. s Reductions can be achieved with action across all major economic sectors, with significant opportunity in power, transport, waste and agriculture Percent of total Mt CO2e Examples of abatement opportunities by 2030 * • Renewables, smart grids, nuclear 26 * • Recycling, landfill methane electricity generation, wastewater treatment 16 * • Light-duty vehicle engine efficiency, increased use of public transport, biofuels 14 * 11 • Reduced tillage, livestock anti-methanogen vaccines, restoration of organic soils * • Reduced deforestation, afforestation, forest management 10 * • Cogeneration, fuel shifts, efficient processes 9 * 7 • Reduced flaring, cogeneration, reduced methane leakage • Energy-efficient appliances, LED lighting, energy-efficiency packages for new buildings * 7 Abatement opportunities by 2030 Source: McKinsey GHG abatement cost curve v2.0; McKinsey analysis

7. An emission reduction of 222 MtCO2e could be achieved in 2030, by pursuing 70 “no regrets” measures identified at a zero or negative cost This would position Mexico in a CO2 concentration stabilization pathway, associated with the 50-50 mitigation long-term goal (with respect to the year 2000). CMM, McKinsey (2008). Project Catalyst, Low Carbon Growth: A Potential Pathway for Mexico. UK.

8. Impact MtCO2 Shortlist of 22 largest initiatives in PECC for 2012. 6 initiatives represent 25.3 MtCO2e, 50% of the total mitigation goal Represent 50% of the total goal Sector Initiative Incorporate more land into the Sustainable Forestry Management system Design and implement an incentive scheme to reduce degradation of forests and deforestation REDD Incorporate forestlands into the environmental service payment schemes Incorporate terrestrial ecosystems into the Wildlife Conservation Management Units (UMAS) Incorporate lands into forestry ecosystems of the Natural Protected Areas Establish a commercial forestland * Forestry * * * * * * Oil & Gas Injection of sour gas in Cantarell Operational oil and gas efficiency projects New operation of a cogeneration plant in Pemex * * Partner with private investors to increase renewable energy in self-generation for private sector by 2 GW Increase CFE generation of wind power Finish CFE thermoelectric project in Manzanillo Finish the construction of hydroelectric plant La Yesca * Power * * * Buildings Substitute appliances including refrigerators, air conditioners, and other equipment and light bulbs with more energy efficient devices Install efficient wood burning stoves Promoteeco-friendly technologies in homes through “green mortgages” * * * Transport Increase train share of federal cargo Create 38 new stretches of highways Take 15 K "clunkers" out of federal transport system Increase clean cargo and passenger transportation under the"Clean Transport“ program * * * * * Waste Develop 29 projects aimed at reducing or eliminating landfill emissions * Agriculture Implement a planned grazing use on pastureland

9. All PECC mitigation measures require substantial investments from both public and private sectors

10. So far mitigation achieved with PECC is approximately 31% of the target set for 2012 MtCO2e • Advances to date: • Mitigation of 16 MtCO2e representing 31% of the annual 2012 target of 51 MtCO2e • Mitigation of 20 MtCO2e representing 15% of the accummulated target (2008-2012) of 129 MtCO2e • Advances are being monitored and registered periodically with a system for the follow up and evaluation of the PECC Target 2008-2012 129.0 140 Advances 2008-2009 Target 2012 120 Advances 2009 100 80 60 40 51.8 50.6 44.5 20 0 22.2 19.3 18.0 15.7 Energy supply Total Waste Agriculture, forests 15.3 Energy use 9.3 8.1 11.8 9.8 8.6 and other land uses 15% 0.6 6.8 5.5 0.5 0.2 31% 3% 4% 1% 2% 18% 45% 22% 45%

11. Additionally, other initiatives are implemented by the FederalGovernment, with a positive impact on Climate Change

12. Under the CDM, Mexico is the fifth country with registered projects representing 5.8% of the total 119 projects have been registered, mostly from waste management in swine farms Around 78% of the CERs* obtained are from HFCs incineration projects. *CERs: Certified Emissions Reduction ** Last updated on February 9th 2010

13. Programa GEI México – Voluntary program of GHG accounting and report • Programa GEI México aims to contribute to the development of mitigation actions in companies and institutions, through voluntary accounting and reporting GHG emissions. • Strategies: • Participating companies can examine their environmental performance and identify mitigation opportunities. • Capacity building for future voluntary or required reports or certificates. • Promotion of participation in carbon markets. • Provide useful information for analyzing different regulatory, technical and economical scenarios associated to GHG. • 2009 • 98 companies • 60 corporate inventories, GEI 2008 • Reported Emissions for 2008: 150 MtCO2e • 21% of National Emissions • 30% of the emissions from national energy final use • 5 CDM company projects • 2006 • 44 companies • 30 corporative inventories, GEI 2005 • Reported Emissions for 2005: 89.27 MtCO2e • 13% of National Emissions. • 20% of national energy supply and use emissions Gradually increasing coverage

14. Programa GEI México – 2012 Perspectives • Increasing coverage: • Coverage of 80% of national GHG emissions from energy supply and end use sectors • Incorporation of 30 new companies and at least 3 new sectors. • Identification and integration of 50 projects in carbon markets (CDM or voluntary). • Establish an electronic registry of emissions and reductions that allows for recognition. Working group with EMA Mexican Accreditation Entity and the private sector for developing processes based on international standards ISO 14064, 14065, and 14066. Operating a validation/certification system of GHG inventories, establishment of baselines, and development of standards.

15. Mexico works together with CCAP in case studies designed to: Explore with industry the feasibility of conditional NAMAs for key national industries Analyze economic sectors to determine their impact on climate change in Mexico; Complete an analysis of how Mexico might participate in the climate framework using a sector-based approach. Sectoral crediting will likely complement CDM as the source of carbon market finance for Mexico

16. ¡Thank you! Juan C. Mata Sandoval juan.mata@semarnat.gob.mx 16